Transit taxes headed for public consultation

Since the start of Rob Ford's term, Toronto residents have watched council fight over how to pay for better transit. Now the public will get a chance to have their say.

On Tuesday, Ford's executive committee approved a plan to consult residents on a menu of new revenue tools that would be used to fund future expansion of the regional transit system.

The list of 10 options presented in a staff report includes road tolls, property and land transfer tax increases, a vehicle registration tax, and a parking levy. Committee members also voted to add several more options to the list, including high occupancy toll lanes, a congestion charge, and a utility bill tax.

Mayor Ford strongly opposes any new tolls or taxes, but has largely abandoned any leadership role on the transit file after council buried his Sheppard subway plan in March. Despite expressing serious reservations, he voted on Tuesday to go ahead with the consultations.

"The people of this city are taxed to death, and they don't want any new taxes," Ford told reporters. "I've made it quite clear that I'm not going to support anything unless the taxpayers of this city come out and say they want a new tax or a new user fee. I don't see them saying that, [but] I could be wrong. That's why we're having the public consultation process."

Instead of using new taxes to pay for expansion, Ford said public-private partnerships, or P3's are "the way to go." Under a P3 formula, a private entity takes on significant financial risk to build an infrastructure project, but is ultimately paid back with public funds.

But city manager Joe Pennachetti was clear that P3's can't bankroll transit construction, and can only be used to lower the cost of projects.

"It's more of a service delivery option. That's why we didn't have it specifically as funding" in the report, Pennachetti told media after the vote.

"It really isn't a funding source, per se."

Committee members voted to add P3's to the list of potential revenue tools, but Pennachetti said staff would make it clear to residents that it's not a funding option.

The city manager's office will begin consultations this fall, both online and at public meetings. Staff will report back to the executive committee in the spring of 2013 with recommendations that will then go to council for approval.

Any revenue tools endorsed by council would be submitted to provincial transit agency Metrolinx for implementation as part of the investment strategy for its 25-year region-wide Big Move plan. Under that strategy, which Metrolinx is due to deliver next June, the province would collect and administer the funds drawn from municipalities across the GTHA.

But TTC chair Karen Stintz is warning that giving the province authority over new transit revenues would mean Toronto losing control of its transportation system's future.

Stintz cites the Downtown Relief Line as the perfect example. While there is broad consensus in Toronto that the long-sought subway route linking the Bloor Danforth Line to downtown should be next up for construction, Metrolinx lists it as a low priority project in the second phase of its $50-billion Big Move plan, scheduled for completion 25 years from now.

"We would be naïve if we thought that Halton, Missisauga, Markham, Unionville, Stouffville, those municipalities wanted to contribute to our Downtown Relief Line," Stintz told the committee.

"I need to underscore... that we cannot rely on the province to fund our transit needs."

Stintz, who recently sparred with Metrolinx over the operation of the TTC's new LRT lines, doesn't oppose contributing to the regional strategy. But in addition she wants council to endorse a funding mechanism that it can control and use for projects it deems important.

The city has the authority to administer some of the proposed options, such as property taxes, parking levies, and development charges. Others, like road tolls, income tax hikes, or sales tax increases, would have to be enacted by provincial legislation.